The Importance of Renters’ Insurance
Having your very own home for the first time is a life event of the utmost impression. The renting of a home can mean so much, perhaps even the feeling of moving up in the world. With the exception of packing and organizing, a move is all generally good for most. However, it is also important to keep in mind how you might fare financially should an accident or some event happen that leads to loss in your new dwelling. By buying good renters insurance, you can keep the contents of your home protected while potentially saving money over the long term.
Who needs it?
Renters insurance is distinguished from homeowners’ or car insurance in that renters insurance only covers personal belongings within the walls of your rented dwelling. The landlord usually will have a policy that covers the actual structure, but if an accident, fire, (or person) destroy any of your personal belongings, then only renter’s insurance will compensate you for lost or damaged items.
You may be under the false impression that your things are not worth all that much, but you might be smart to ponder the total dollar amount it would take to replace all of it right now. Most renters certainly couldn’t find such an amount without breaking the bank and/or going into debt. Also, and quite vitally, a renter’s insurance policy can give coverage to you if someone were to hurt themselves while inside your place and sue. Keep in mind that this coverage is so important some landlords may require that you carry it.
What it covers
Normally a renter’s policy will cover losses resulting from such things as fire, theft, vandalism, a leaky pipe, and severe weather events. However, this policy like others, will likely exclude such natural disasters as floods, hurricanes, or earthquakes. These events will usually need to be covered by separate policies and, depending on where you live, these additional coverage options could be important.
How it functions
Renter’s coverage is for those who live in a dwelling that they do not own. If you own property that you rent out, the coverage you need is a landlord policy, not a renter’s policy. If you ever need to file a claim, you first have to pay a deductible. The deductible on your policy is the amount you must first pay before your insurance plan kicks in. Generally, the larger the deductible, the lower the premiums are.
Types of coverage
Renters coverage is pretty standard, though there are differences depending on the kind of home in which you live. The main variance in policies is the compensation choices: One type is “actual cash” that gives you the value for your things minus depreciation. “Replacement value” policies will normally be more expensive, but you get more reimbursement for damages and loss.
The major plus of a good renter’s insurance policy is the financial protection in the event of some loss. An additional plus is that renter’s coverage is relatively affordable, yet very effective when needed.